A closer look at the rapid rise of mixed-use development

Investors and developers alike across the U.S. are now venturing into mixed-use opportunities, understanding that modern-day consumers are looking for more integrated destinations for interacting, engaging, shopping, playing, and working. In fact, a significant segment of the country’s construction boom of last year is made up of mixed-use properties.

That mixed-use is on the rise is mainly due to a paradigm shift in the way people view real estate development. More and more people expect their communities to feature restaurants, coffee shops, grocery stores, fitness amenities, and hospitals. In this sense, property developers are just reacting to and meeting increased consumer demand for convenience.

It’s not so much just an effect of an instant-gratification culture, but a newfound awareness of more sustainable options, like consumers not using their cars and their fuel when leaving the house. Many people today also prefer the overall convenience of online shopping; if they are to go out of their way for such, they rather not venture far from their homes.

Mixed-use also remedies the long-standing problem of finding a more effective use for the land, especially in supply-limited areas like major metros and coastal regions. Large-scale single products are being relegated to the background as more and more people are preferring easier-to-access and local-based offerings.

Finally, as far as investors are concerned, mixed-use developments offer more diversified and balanced portfolios while providing better downside protection. Since these types of properties hold a variety of usages and tenants, it allows investors to better safeguard themselves from sudden vacancies and calculate quicker and earlier on their net operating income.

Tyler Tysdal is a private equity and real estate investor who firmly believes in the importance of conscious capitalism and its social impact on businesses and communities. He is part of the private fund advisor TitleCard Capital Group LLC. For more on Tyler and his work, check out this page.

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